Treacy Roberts, ExxonMobil, USA

Elizabeth Wild, BP, UK

Maria Bernada Zapata Martinez, Repsol, Spain

Francois Breant, Total, France

Vincent Bordmann, Total, France

Estella Nucci, IPIECA

Elena Oskolskaya

ExxonMobil, USAUpstream National Content Manager

Developing a Local Content Strategy – Guidance Document by IPIECA

Forum 23: Social Responsibility requirements for financing energy projects

Introduction

Guidance Document Objective:

• Provide guidance on development, implementation and management of sustainable

local content strategy to local content practitioners in oil and gas companies

Methodology:

• IPIECA Local Content Task Force began in

2007

• Initial focus on defining local content evolved to

a high-level guide

• Interviews were conducted with practitioners

from several oil & gas companies

Local Content

Definition:

• Local Content is defined as added value brought to a host nation through:

0 Workforce development: employment and training local workforce

0 Supplier development: procuring supplies and services locally and developing

local supplier capacity

Rationale:

• Meet local content regulatory requirements

• Enhance engagement with stakeholders

• Contribute to sustainable economic growth

• Achieve long-term value while

demonstrating social responsibility

Outline of Guidance Document

The guidance is divided into three sections:

Part 1—Introduction: drivers and objectives of an effective local content strategy

 

Part 2—Developing capacity: detail on developing the primary components of a local content strategy, such as building local workforce and supplier capacity

 

Part 3—Implementing and sustaining local content: key issues that practitioners can consider to ensure successful implementation of a local content strategy

Part 1 – Local Content Strategy Development

• Key drivers of successful strategy:

0 Local context

• Understand demand-side requirements, the supply-side capabilities, and any barriers that limit local participation

0 Regulatory requirements

• Address regulatory driven targets for

local content development

0 Business expectations

• Identify strategic and commercial

reasons for investing in local content

0 Stakeholder expectations

• Define internal and external stakeholders and their objectives

Part 2 – Capacity Development

• An effective local content program focuses on local workforce and local

supplier capacity building

• Key approaches to workforce development:

� Employment policies

� Training and skill development

� Investments in education

� Construction phase employment

• Strategies to promote local supplier development:

� Direct procurement of local goods and services by oil and gas companies

� Indirect procurement by companies’ major contractors

Part 3: Implementing and Sustaining Local Content

• Effective internal organization and coordination are two elements

successful strategies have in common

• Close collaboration with other stakeholders play a key role in developing

an effective local content strategy

• Infrastructure is crucial to sustainability of

local content plans and activities

• Appropriate measurement process that

allows monitoring performance against

objectives and encourages continuous

improvements should be built in every plan

Summary

• Local content has become a strategic issue for the oil and gas industry – a comprehensive strategy is recommended to address associated opportunities and challenges

• Key success factors for local content strategy

implementation are:0 Contextual analysis0 Starting early0 Long-term perspective0 Good communications

• Local content programs are worth the effort, providing strategic and commercial benefits for the company, and economic growth and sustainable development for the host nation

the global oil and gas industry association

for environmental and social issues

www.ipieca.org

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